Becker's Hospital Review

33 Executive Briefing Sponsored by: I s your A/R operation draining profits? In the past decade, amid a perfect storm of rising healthcare costs, sweeping regulatory activity, dwindling insurance payouts, and other pressures, the ground beneath hospitals and other large healthcare providers has shifted dramatically. Many of these providers are still struggling to regain their footing. Although hospitals' median annual revenue growth surpassed expense inflation by 0.1 percent in 2018, their margins fell to a meager 1.7 percent (from 1.8 percent in 2017). As providers look for creative ways to ensure long-term financial health and profitability, many are turning their focus to managing operating costs that eat away at the bottom line. A 2018 survey of healthcare industry executives revealed that 52 percent see revenue growth as their top business challenge for 2019, with rising expenses (38 percent) and managing labor costs (37 percent) following closely behind. One of the biggest but most overlooked revenue drains in the healthcare industry is the revenue cycle process. Rather than boosting profitability through revenue recovery, many A/R departments are operating well below their potential for efficiency, productivity and results — thus limiting providers' ability to compete and grow. Problem #1: Rising labor costs in a high-turnover field A 2017 Deloitte report reveals that labor accounts for about half of hospitals' total operating expenses. While providers continue to grapple with rising labor costs, they must also bear the high costs of replacing employees who leave. As of 2017, the average turnover rate in the healthcare industry was 20.6 percent (second only to hospitality). Among 850 clinical and nonclinical healthcare workers surveyed that same year, 37 percent planned to leave their current jobs within two years, and nearly 70 percent planned to leave within five years. For every disengaged or dissatisfied collector who quits, providers must hire, train, and pay "hidden" costs related to lost productivity and lower-quality output. Although many providers are resigned to employee attrition, it's one of the biggest cost drivers there is. Problem #2: The scramble to collect from a shrinking reimbursement pool Patient's financial responsibility for the healthcare services they receive has skyrocketed in recent years. In the five-year period from Q1 2012 to Q1 2017, the proportion of hospital revenues attributed to patient balances after insurance (PBAI) grew 88 percent. Historically, providers have struggled to collect PBAI. Now that reimbursements are dropping, there's less to collect through claims follow-up and denials management — and a more urgent focus on collecting as much of that revenue as possible. Hiring more collectors to work through a higher volume of accounts is always an option, but that's tough to do in a high-turnover environment. The only way to ramp up collections results with an existing team is to ensure every A/R person is fully engaged, making the most of their time, and inclined to stay long term. Unfortunately, most providers aren't equipped to achieve this ideal. Is there a way to conquer both problems quickly? With so many industry challenges and operating costs weighing you down, how can you get more done with fewer collectors, accelerate cashflow, and improve the collection of both patient and payer liabilities? The solution is surprisingly simple. You can magnify your investments in EHR and labor, enhancing their capabilities and value by way of an "accountable" revenue cycle — one you can track and manage with ease. Whether your collectors are working on site or at home, you can effectively measure and improve their performance and productivity. If you want to get ahead in the current industry climate, accountable A/R is mission critical. The EHR platform gap In the past decade, EHRs have become a standard feature for hospitals, health systems and ancillary providers. They not only increase operational efficiencies and improve patient care, but also support and simplify the revenue cycle by verifying insurance coverage in real time, improving billing accuracy, streamlining claims filing, and reducing insurance denials and lost charges. EHR systems give providers the reporting capabilities and tools they need to make better administrative and clinical decisions, lower costs across the enterprise and capture more revenue. However, as integral as EHRs are in large, high-volume healthcare settings, they're limited in their capacity to streamline and improve each collector's impact on A/R operations. The final barrier to RCM optimization The healthcare revenue cycle ultimately depends on the front-line teams that power it. Collectors who spend their days following up on patient invoices and insurance claims must be well trained, well equipped, well managed, and properly motivated to optimize the revenue cycle. For the industry's most successful collection teams, accountability is the engine that drives results. Unfortunately, many providers' existing EHR solutions lack the automation and insights needed to build accountability into the collections process. Collectors aren't empowered to make best use of their time, and providers don't have a clear view of when and how accounts are being worked to completion. Given the growing work-at-home trend among healthcare A/R teams, the insight and performance gaps that hold these teams back will only continue to widen. The accountable collector: Transforming healthcare A/R with one simple fix By Shawn Yates, director of healthcare product management with Ontario Systems

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